Viacom v. YouTube: Not a Surprise

As I mentioned below, the long-awaited Second Circuit decision in Viacom v. YouTube and its companion case, Football Association Premier League v. YouTube, was handed down today, with the Second Circuit reversing the district court opinion in part, affirming in part, and remanding for another round of summary judgement motions (yeehaw!) consistent with the opinion. Eric Goldman has some early analysis. Here’s my take, based on a single read, so I reserve the right to “revise and extend” my remarks.

I’ve got several points I want to make:

1. The overall outcome is not a surprise, to me at least.
2. On the issue of “What, beyond responding to individual takedown notices, do ISPs have to do to maintain their Section 512 immunity?” the answer is a) something — which is a win for plaintiffs — but b) not much, which is a win for defendants.
3. The court I think identifies the correct role for “red flags” — at least, it was the one argued for in the amicus brief I drafted — but on the question of what constitutes “knowledge” I think the opinion is less successful. The distinction drawn between “specific vs. general” knowledge, both here and in connection with secondary liability generally, is I think not helpful and in any event will soon break down.
4. The court helpfully ducks the massive red herring, subject of a considerable amount of argument in the briefs, blog commentary, and mentioned in the opinion below, over whether the fact that some allegedly infringing works may in fact be authorized should somehow bear on the interpretation of Section 512.
5. It’s interesting and perhaps unsurprising that the court avoids legislative history and purpose as tools for interpreting the statute — with one significant (and I think salutary) exception.
6. Just like the exclusionary rule sometimes warps Fourth Amendment criminal procedure law, there is reason here to be concerned that statutory damages might warp the substantive law governing the liability of ISPs.
7. I have some higher-level thoughts on what the decision means for content owners and ISPs.

That’s a pretty long list, actually, so I’m going to have to break this up into multiple posts.

The Outcome Is Not a Surprise

The district court opinion essentially read portions out of the statute.

The district court held that, even though there was evidence presented that YouTube executives knew of some infringing activity, thus raising at least a disputed issue of material fact as to the “knowledge or awareness” exceptions in Section 512(c)(1)(A), nevertheless the safe harbor applied because “when YouTube was given [takedown] notices, it removed the material. It is thus protected ‘from liability for all monetary relief for direct, vicarious and contributory infringement’ subject to the specific provisions of the DMCA.” 718 F. Supp. 2d at 526. The “knowledge or awareness” exceptions applied only to “knowledge of specific and identifiable infringements of particular individual items” — which the court appeared to equate with “the DMCA notification regime.” Id. at 523-24. In other words, the only way an ISP can get the requisite knowledge under Section 512(c)(1)(A) is to receive a takedown notice specifically identifying an infringing file by URL — which of course is exactly what Section 512(c)(1)(C) provides for (and Section 512(c)(3)(B)(i) makes clear that a defective notice — a letter from a content owner that does not comply with Section 512(c)(3) — does not give the requisite knowledge, so that is not the purpose of the “knowledge or awareness” exceptions).

Second, the court also essentially read out the “vicarious-liability-like” exception in Section 512(c)(1)(B) (more about that later), which says that an ISP gets no immunity if it “does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity.” The district court inexplicably added a “knowledge” element to this, even though knowledge is neither part of the traditional vicarious liability concept nor mentioned in the statute, and held that where an ISP did not specifically know of a particular infringing file, its ability to control such activity was irrelevant. As the Second Circuit noted, this also had the effect of collapsing (c)(1)(B) onto (c)(1)(A), which already deals with “knowledge” situations.

The end result was that the district court held that the only evidence that was material in deciding whether YouTube fell within the Section 512(c) safe harbor was whether it complied with takedown notices. But given that the plaintiffs were not even challenging YouTube’s response to takedown notices, the district court’s decision essentially made all of the discovery in the case irrelevant — it could have been written three years earlier on a motion to dismiss. Indeed, that is probably what explains the fact that the district court issued its opinion a mere nine days after briefing on the cross-motions for summary judgement, which had taken three months to complete, were fully submitted, without even so much as holding oral argument. Some indication of the novelty of the district court’s holding I think is indicated by the fact that YouTube did not even file a motion to dismiss, but instead proceeded directly to an answer. (I wonder if lawyers at YouTube were kicking themselves for that decision after reading the district court’s opinion.)

It turns out that that was all too easy. The Second Circuit decision unsurprisingly held that the nullified provisions of Section 512(c) actually must mean something. Thus, Judge Cabranes, writing the opinion, referred repeatedly to the well-established canon that “statutory interpretations that render language superfluous are disfavored.” Section 512(c)(1)(A) excludes immunity for ISPs that know of infringing activity or are aware of facts or circumstances from which infringing activity is apparent; Section 512(c)(1)(B) excludes immunity where an ISP has the “right and ability to control” the activity and directly profits from it. The Second Circuit remanded for further consideration of whether either of these exceptions was satisfied (given the first go-round, I’m not sanguine about avoiding another appeal).

But that still leaves the question of what, precisely, the Second Circuit thinks these exceptions mean. More on that in the next post.